UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

 

FIDELITY & GUARANTY LIFE 

INSURANCE COMPANY, 

 Plaintiff - Appellee, 

v. 

PATRICIA LITCHFIELD; LONNIE 

WILLIAM LITCHFIELD, 

 Defendants - Appellants. 

No. 14-6147 

(D.C. No. 5:13-CV-01040-R) 

(W.D. Okla.)

 

ORDER AND JUDGMENT*

 

Before KELLY, BALDOCK, and MORITZ, Circuit Judges. 

 

 Fidelity & Guaranty Life Insurance Co. filed a complaint seeking a declaratory 

judgment that it was not obligated to pay death benefits under a term life insurance 

policy because that policy had been converted to a universal life insurance policy and 

death benefits were paid under that policy. The district court granted summary 

judgment to Fidelity & Guaranty. Patricia Litchfield, the widow of the insured, Lee 

 

* After examining the briefs and appellate record, this panel has determined 

unanimously that oral argument would not materially assist the determination of this 

appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore 

ordered submitted without oral argument. This order and judgment is not binding 

precedent, except under the doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive value consistent with 

Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals 

Tenth Circuit 

February 18, 2015

Elisabeth A. Shumaker 

Clerk of Court
- 2 - 

Litchfield, and Lonnie William Litchfield, the owner and beneficiary of the policies 

and the brother of Lee, appeal from the grant of summary judgment. Exercising 

jurisdiction under 28 U.S.C. § 1291, we affirm. 

 In 1998, Fidelity & Guaranty issued a $1,000,000 term life insurance policy to 

Lonnie insuring Lee’s life. The policy provided, in part, that it would terminate if it 

was exchanged for a new policy on the insured’s life. 

In 2011, Lonnie and Lee completed a policy change application to convert the 

term life insurance policy to a universal life insurance policy. Fidelity & Guaranty 

approved the change application and issued a universal life insurance policy to 

Lonnie, insuring Lee’s life for $1,000,000. Fidelity & Guaranty sent Lonnie a letter 

telling him that the term life insurance policy had been terminated and that all 

benefits previously provided were null and void. 

 Despite the conversion and termination of the term life insurance policy, 

Fidelity & Guaranty’s offshore processor did not make an entry in its computer 

system to reflect the termination. So premium notices for the term life insurance 

policy were automatically generated and continued to be sent. Premium notices were 

also sent for the universal life insurance policy. Lonnie paid the premiums for both 

policies, and Fidelity & Guaranty kept the payments. During the time Lonnie was 

making both sets of payments, a Fidelity & Guaranty customer service representative, 

who consulted Fidelity & Guaranty’s computer system, informed Lonnie that the 

term life insurance policy was in effect. 
- 3 - 

Lee died in July 2013, eighteen months after the conversion of the term life 

insurance policy to the universal life insurance policy. Lonnie contacted Fidelity & 

Guaranty and made a claim for death benefits under both policies. In reviewing the 

claim, Fidelity & Guaranty realized that although the term life insurance policy had 

terminated, its system indicated that it was still in effect, and it had mistakenly sent 

payment notices and accepted payments on the term life insurance policy. Fidelity & 

Guaranty refunded, with interest, the premiums paid on the term life insurance policy 

for the prior eighteen months. It also paid Lonnie the $1,000,000 death benefit, with 

interest, under the universal life insurance policy. 

Lonnie and Patricia demanded in writing that Fidelity & Guaranty pay the 

death benefit under the term life insurance policy. Fidelity & Guaranty filed this suit 

seeking a declaration that it has no obligation to pay a death benefit under the term 

life insurance policy. Fidelity & Guaranty moved for summary judgment. Patricia 

and Lonnie argued that Fidelity & Guaranty should be estopped from denying 

coverage under the term life insurance policy and that Fidelity & Guaranty waived an 

argument that it terminated the term life insurance policy. Also, they asserted 

counterclaims for breach of contract and bad faith by Fidelity & Guaranty. 

The district court granted summary judgment, determining that Fidelity & 

Guaranty converted the term life insurance policy to a universal life insurance policy 

at Lonnie’s request, only the universal life insurance policy was in effect at the time 

of Lee’s death, equitable estoppel does not apply because Fidelity & Guaranty’s 
- 4 - 

off-shore processors made an administrative mistake, and that unintentional mistake 

could not result in a waiver.1

 Consequently, the court declared that Fidelity & 

Guaranty did not owe Lonnie and Patricia an additional $1,000,000 under the term 

life insurance policy. In addition, the court rejected their counterclaims for breach of 

contract for failing to pay the death benefit under the term life insurance policy and 

for bad faith deprivation of benefits under that policy. 

Patricia and Lonnie argue that the district court erred in granting summary 

judgment in favor of Fidelity & Guaranty because (1) Fidelity & Guaranty’s mistake 

did not relieve it from its duty to pay the term life insurance policy death benefit or 

from the applicability of waiver and estoppel; and (2) the reasonable-expectations 

doctrine along with the parties’ intent support modification and reinstatement of the 

term life insurance policy. “We review [the] grant of summary judgment de novo, 

applying the same standard as the district court.” Oldenkamp v. United Am. Ins. Co., 

619 F.3d 1243, 1246 (10th Cir. 2010) (internal quotation marks omitted). Under 

Federal Rule of Civil Procedure 56(a), the court properly “grant[ed] summary 

judgment if [Fidelity & Guaranty] show[ed] that there is no genuine dispute as to any 

material fact and [it] is entitled to judgment as a matter of law.” We consider the 

record and its inferences in the light most favorable to Patricia and Lonnie. See

Oldenkamp, 619 F.3d at 1246. 

 

1

 The district court also denied Patricia’s and Lonnie’s motion for partial 

summary judgment. 
- 5 - 

 After considering the parties’ briefs, appellants’ appendix, and the relevant 

law, in accordance with the above summary-judgment standard of review, we agree 

with the district court’s disposition of the case and conclude that there are no genuine 

issues of material fact and that Fidelity & Guaranty is entitled to judgment as a 

matter of law. Accordingly, we affirm the court for substantially the same reasons 

set forth in the court’s order of June 19, 2014. See Aplt. App., Vol. II, at 771-81. 

 The judgment of the district court is affirmed. 

 Entered for the Court 

 Bobby R. Baldock 

 Circuit Judge